The Home Shopping Network is about more than cubic zirconium.
HSN has a revamped lineup of merchandise and a new look under the leadership of former Nike executive Mindy Grossman. On Monday, Barry Diller, chief executive officer of parent IAC/InterActiveCorp., said the media and Internet company will break itself into five publicly traded businesses, spinning off HSN and its other largest units, while keeping the 30 fastest-growing firms in its portfolio.
The corporate breakup comes as Grossman, ceo of HSN's parent, IAC Retailing, is beginning to see the results of an 18-month turnaround effort.
For the third quarter, revenue at HSN advanced 5 percent, excluding America's Store, a spin-off of HSN, which closed in April. Online sales grew by double digits. "HSN, I believe, now has a solid strategy and the leadership to thrive as a 'pure play' retailer," Diller said in a statement.
The previous two quarters were bumpy. In the first quarter, HSN's revenue, excluding America's Store, grew 1 percent. HSN's revenue in the second quarter declined by 1 percent. Excluding the results of America's Store, HSN grew revenue 3 percent in the second quarter.
When IAC reported third-quarter results last Wednesday, Diller said, "Trends at our businesses are good, and particularly so at HSN. I believe that Mindy Grossman and her team have now become acclimated and are beginning to demonstrate the great retailing smarts that we knew they were capable of."
Since arriving at HSN in May 2006, Grossman, former Nike Inc. global vice president of apparel, has sought to change the network's image as a purveyor of cubic zirconium jewelry and embellished kitschy apparel by introducing fashion-forward products, more entertaining programming and new sets and graphics. Grossman has tried to dispel the notion that HSN shoppers have low incomes and a low taste level, citing examples of her theory such as Kooba handbags, $800, and Theory jackets, $855, which sold out in August during a program, "Scoop Style," with Scoop NYC co-owner Stefani Greenfield.
"When I first came to the company everybody asked me, 'Are you going to go high end?'" Grossman said, sitting in her office at HSN's St. Petersburg, Fla., headquarters as multiple TV screens broadcast HSN shows and those of the competition. "We're in 90 million homes. We need to be aspirational. We have a floor we won't go below in terms of quality and taste level, but we're not looking to be a luxury brand. We've sold $3,000 Carlos Falchi handbags, but we don't want to ever make the customer feels she's not welcome."
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